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Trouble In and Out of School: Part Three -- A 'Double Dipping' Buyout for Superintendent Herenton

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The third of a three-part series. Read Part One here, and Part Two here.

Memphis lawyer Dan Norwood, whose practice, oriented to public-service cases, often brought him into contact with the administrative team of schools superintendent Willie Herenton, marvels even today at the financial legerdemain on display at Memphis City Schools headquarters on Avery during the '80s and early '90s.

"Those guys could hide the money!" he recalls admiringly, referring not to any graft or dishonesty but rather to the ability of the superintendent's financial advisers - notably then deputy superintendent Ray Holt - to disguise and channel the various assets of MCS in such a way as to justify annual budget requests based on scarcity while maintaining emergency "rainy day" reserves just in case those requests were not accommodated by local government.

Thus it was that the school system during the Herenton years was able to stay in surplus through lean times and fat, and it was by calling on the same expertise that a beleaguered superintendent Herenton negotiated a more generous settlement with the school board - a buyout of his contract, is what it came to - than was publicly realized at the time.

So masked were the conditions of Superintendent Herenton's retirement agreement in 1991 that even today, almost a score of years after the event, brand-new conspiracy theories have surfaced, alleging that Mayor Herenton, by resigning and becoming superintendent once more, would stand thereby to enhance the pension he earned from his years of service with Memphis City Schools.

Compensation plus a full pension plus two salaries

As the theory goes, since Herenton served 28 years with MCS and was granted another more or less honorary year as part of his 1991 settlement agreement with the school board, he would greatly escalate his pension during his first additional year of service should he get hired again as superintendent.

The problem with that theory is that Herenton has already been credited with 30 years of service, with all the pension benefits which would ensue from the fact. That was a condition that he negotiated back in 1991 as an essential part of his retirement agreement with the school board.

That fact escaped public notice at the time but was revealed in a Flyer cover story of February 13, 1992. The article, entitled "Double Dipping," was published barely a month after Willie Herenton, now fully redeemed as a public figure, had taken the oath as Memphis mayor. Herenton, aided by Get-Out-the-Vote efforts from then congressman Harold Ford Sr., a political rival, had become the first African American to gain the office via election -- in an upset victory over incumbent mayor Dick Hackett that was justly regarded as epochal in its implications.

"Double Dipping" was so titled because of its revelation that during the course of the same year that he would be serving as the city's fully salaried chief executive, Mayor Herenton would continue to be carried, under the classification "full time, active," on the books of Memphis City Schools. He would, in fact, be drawing his former annual MCS salary of $120,717 while being paid $100,000 to run Memphis city government.

Moreover, this extra year of service was interpreted as being added on to a de facto severance year - making his total 30 years officially instead of the 29 years' worth that were announced to the public at the time of Herenton's retirement announcement. That "30th" year was added on in the course of a technical supplement to the retirement package worked out between Herenton and then acting superintendent Holt, the former deputy who had temporarily succeeded his boss.

In effect, the buyout package was structured so as to compensate superintendent Herenton for retirement short of a full 30 years with MCS, while simultaneously granting him the wherewithal to claim the advantages of a 30-year retirement!

The difference, in pension benefits alone, would amount to at least $500,000 (the sum was subject to adjustments for inflation and cost-of-living increases) over the course of the next 20 years. The retiring superintendent was also granted $106, 616 in accrued sick leave - covering both of the extra years of service, the severance year spoken to in the agreement and the phantom 30th year.

'Some of us wanted to fire him outright'

J.C. Williams, the school board president who had signed the buyout package on behalf of the school system (the only other signatory was Herenton), would acknowledge the stealth nature of these financial add-on features. "I did not know that Dr. Herenton intended to remain on the school payroll, and I did not find out that he was still being carried until late last year," said Williams in February 1992, insisting that, had he known, he would not have signed the buyout agreement.

Herenton himself, when asked in 1992 about the newly unearthed terms of his retirement package, wondered what all the fuss was about. The agreement was like any other executive retirement package, he said, in it it was not based on normal formulas but was "independent of the practices that govern the [school] board's employment of other individuals."

Anyhow, he contended, the package was consistent with roll-over provisions contained in his existing contract with the school board.

The new mayor could certainly not be faulted for having negotiated such unexpectedly favorable terms. He was free to, and, in a way, it spoke to an innate shrewdness that might serve him well in his new and challenging job as mayor of a major urban metropolis.

Mal Mauney, who, as chairman of the school board's personnel committee at the time, did much of he negotiating with Herenton, commented wryly in 1992: "Frankly, there were some of us who wanted to fire him outright. But let's face it, unless we struck a bargain which we could get him to agree to, he was unassailable."

Mauney went on to elaborate that Herenton's support base in the city's African-American community was strong and loyal and that a negative reaction from these constituents was "something we had to take seriously."

Regardless, that's how one career ended, and another began - perhaps, after 16 mayoral years that have been both widely admired and widely criticized, to recycle into a reprise of that first career.

This concludes a Three-Part series on how superintendent, later mayor, Willie Herenton came to part the ways with Memphis City Schools after what could turn out to have been his first stint with MCS.

Read Part One.

Read Part Two.

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